Alaska seafood processors expect higher costs, possible market growth in 2021

Ocean Beauty’s seafood processing plant in Petersburg
Ocean Beauty’s seafood processing plant in Petersburg. (Joe Viechnicki/KFSK)

Alaska’s seafood industry has a lot of moving parts. There are the fishermen, the processors, the market — as well as the fish themselves.

By all accounts, the pandemic has been hard on the processors. Last year, they spent about $70 million in mitigation measures and responding to the pandemic. But this year it’s expected to be even more. Over $100 million.

A lot of that has already been spent.

“There were challenges and some plant closures that happened despite all these protocols,” said Dan Lesh of the McKinley Research Group.

McKinley surveyed processors and others in March about the effects of COVID-19 on Alaska’s seafood industry. He says the flat fish industry was hit hard with outbreaks in January causing expensive plant closures. Those costs are in addition to the ongoing price for pandemic mitigation.

“A lot of these costs are already baked in, and my understanding is that most the mitigation measures will be continued,” Lesh said.

In other words, this calendar year has more months when processors will be dealing with the pandemic.

Processors surveyed said their peak employment last year dropped 31%. That’s from intentionally smaller workforces, as well as problems recruiting and retaining workers. Two-thirds of processors received pandemic relief money, but it only covered 24% of their costs, on average.

“None of the processors said it covered even half of their costs. 35% was the highest estimate we got in our survey,” Lesh said.

But Lesh says there’s hope that more relief money could come this year with newer programs.

As for the seafood market? While it’s hard to summarize all species together. Some areas saw growth. Salmon, for example.

“Every indication is that everything’s been sold out from last year,” Lesh said.

“There were times where we saw 30-40% increases in frozen and fresh seafood sales,” said Ashley Heimbigner of the Alaska Seafood Marketing Institute, which contracted the research group for the surveys. She says online seafood sales skyrocketed during the pandemic.

“So people are also getting more comfortable buying seafood online,” Heimbigner said “And that’s through Instacart or their local grocer but also through community-supported fisheries and direct marketers ordering direct from fishermen, as well so people are seeking out new ways to find these new seafood purchasing options.”

That’s online, though. The food service market dropped out as restaurants were closed. And that instability affected prices paid to fishermen.

Then there’s the fish. 2020 is considered the worst year for salmon since the 1970s, and the state is seeking eight separate fisheries disaster declarations.

The forecasts for some species don’t look very promising. Chum are expected to be down 23% from the 10-year average. Pinks, which return every other year, could be down 41% from recent odd-years.

But it’s hard to predict what exactly the season will be like. One thing’s for sure: vaccinations are going to play a major role.

One of Alaska’s biggest processors, Trident Seafoods, is requiring a fully vaccinated workforce for its Petersburg plant. Last year workers stayed in a closed campus. In an email, spokesperson Shannon Carroll says they’ll keep campus open this year with some restrictions, as long as the town is in a low risk status.

Tonka Seafoods, a smaller local processor isn’t requiring vaccinations but is strongly encouraging them with incentives. Co-owner Seth Scrimcher says about 80% of its workforce is vaccinated.

Petersburg’s largest processor, OBI, which employs hundreds of workers, would not comment for this story. However, Petersburg’s emergency operations center said the company told the borough that they planned a 90% vaccination rate for resident employees and 100% for transient workers. And if they achieve this, then they would likely have an open campus.

Ultimately, how 2021 turns out for the multi-billion dollar industry will remain unknown. At least for now.

KFSK - Petersburg

KFSK is our partner station in Petersburg. KTOO collaborates with partners across the state to cover important news and to share stories with our audiences.

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